Napier - Gisborne Line Is All But Officially Closed For Good (New Speak - "Mothballed")

In a move that is not entirely surprising, but never the less dissapointing for the region, and symbolic of the nations lack of vision - The Napier - Gisborne line is all but officially permanently closed.

More comment to follow but the press releases from KiwiRail, NZ Government, the Green and Labour Parties are as below:

KiwiRail to mothball Napier-Gisborne line

2 October 2012

The Napier to Gisborne line is to be mothballed due to the prohibitive costs to both repair storm damage caused earlier this year and maintain the rail line over coming years.

KiwiRail chief executive Jim Quinn says KiwiRail staff had taken a long and hard look at future business prospects for the rail freight line and had determined it unlikely to generate sufficient revenue in the foreseeable future to cover costs.

Freight rail services to Gisborne have been suspended since March after serious storm damage caused several large washouts north of Wairoa. Reinstatement of the line was expected to cost around $4 million and would take several months to complete.However ongoing costs to maintain the rail track and structures along it, such as bridges, were likely to rise from the current level of around $2 million a year, to $6 million a year to ensure the line could continue to support freight services. For example several of the bridges along the route are nearing the end of their expected life and would need replacing.The $6 million would be a direct subsidy and using 2011/12 operations as a guide this would equate to a subsidy of $37,000 per trip.In determining its decision,

KiwiRail spent considerable time canvassing local business about current and future business opportunities and taken a 10 year future look at the line. Mr Quinn says the review indicated revenue on the line could grow from the current level of around $1 million to approximately $2.5 million per annum in future years.

“However, the costs of both running the trains and maintaining the infrastructure would mean an annual cash deficit of between $5 million and $8 million a year.

”For the 2012 financial year to March, the line carried 44,345 tonnes and generated revenue of $1.04 million. However there was a cash deficit of $2.4 million after operating costs and annual line maintenance costs.

Mr Quinn acknowledged there had been an upturn in volumes carried on the line in the months prior to March, but it still fell well short of making the line financially sustainable.

“We acknowledge the support given by the local businesses and the wider community for retaining rail to the region. However, we need to ensure we invest in areas of the network where we are able to grow business to a level it is commercially sustainable, and sometimes that means making hard decisions,” Mr Quinn says.

“Since 2010 the government has invested $750 million in the rail freight business as part of our strategy to get the business operating commercially and on a more sustainable financial footing.

”Mr Quinn says it is as yet unclear what impact the decision would have on staff numbers, although it was likely there would be a small number of job losses.“We will be working through that process with local staff and the union over the coming weeks,” Mr Quinn says.

Mr Quinn says KiwiRail recognised the strategic importance of maintaining the option to reinstate the line, should a major revenue generating opportunity present itself in the future.

“Mothballing the line, rather than closing it preserves that option,” he says. It allows us to look at opportunities as they evolve.

”KiwiRail and the Government would now work with the region to consider the strategic value the line has to the wider New Zealand economy, including alternative uses for the corridor and how best to realise that value for the good of the New Zealand economy.

KiwiRail also assessed the option of operating rail services between Wairoa and Napier, but this was also discounted as the majority of freight movements were to, or from, Gisborne. The traffic expected from Wairoa was not enough on its own to sustain services, Mr Quinn says.

KiwiRail worked closely with NZTA to establish impacts on wider transport networks and their advice concludes that ceasing rail services would have a minimal impact on the overall level of service on the highway.

KiwiRail was also working with the Gisborne City Vintage Railway to explore possible options for continued heritage operations in the region.Additional information for media: The full report which formed the basis for the decision can be found here.

Transport Minister Gerry Brownlee has announced Cabinet approval for $4 million of funding for the design and construction of passing opportunities on State Highway 2 between Napier and Gisborne.

“I acknowledge concerns about getting freight in and out of the Gisborne region in the most cost effective way since the Napier to Gisborne rail line closed north of Wairoa in March following storm damage, and the subsequent decision by KiwiRail to mothball the line.

“That’s why the Government is investing up to $4 million on top of what’s already available through the National Land Transport Programme for the road,” Mr Brownlee says.

The NZ Transport Agency will complete the design of a series of passing opportunities in the next few months. The areas of State Highway 2 under consideration for passing opportunities are Kopua Hill and several locations between Lake Tutira and Te Ngaru. The total cost of the design and construction is estimated at between $3 and $4 million.

The National Land Transport Programme has also allocated $9 to $10 million over the next three years to improve the condition of the road and maintain State Highway 2 to modern highway standards. This investment will be targeted at the sections where most improvement is needed.

“I also recognise the added importance the State highway will now play as the key link between Napier and Gisborne and therefore priority must be given to ensuring the route continues to deliver the required support for current and future use,” Mr Brownlee says.

Additional road traffic generated by mothballing the rail line is not expected to have a significant impact on the State highway. It is estimated that the 50,000 tonnes of freight carried annually on the rail line before March has resulted in approximately five extra trucks using the road each day.

As well as the passing opportunities, the NZ Transport Agency will increase its monitoring of the impact of heavy traffic on the condition of the road.

KiwiRail’s decision to close the Gisborne-Napier rail line is a huge disappointment for the Gisborne community and a result of the National Government’s wrong-headed transport policy, Green Party transport spokesperson Julie Anne Genter said today.

“While billions of taxpayer dollars are being poured into uneconomic motorway projects, energy-efficient rail is being strangled for want of a few million dollars,” said Ms Genter.

“Rail lines are expected to generate maximum profits, but the wider economic benefits they create are ignored. The opposite seems to be the case for the National Government’s uneconomic motorways.

“KiwiRail says that moving the Gisborne-Napier rail line takes 1,700 truck trips per year of the road. Yet the cost in road damage of moving that freight by trucks has not been factored into its decision to close the line. In fact, the National Government is now planning to spend $4 million to on the Gisborne-Napier highway, the same amount needed to repair the rail line.

"It's obvious that the Key Government wants to get KiwiRail into a position to privatise. Why else would they have such a narrow focus on profit margins?

"The National Government is wasting billions of dollars on a few big motorway projects that would never be able to pay their own way as standalone commercial projects. But it won't invest a few million dollars in getting our rail network back up to scratch and taking more trucks off the road.

“This is a huge blow to the Gisborne economy and to the local community, which has fought so hard to save its rail line. It is a disgrace that their pleas have been ignored for want of $4 million in repairs.

"The country could also be using the revitalisation of rail to create valuable green jobs.

"Most countries are now investing substantially in their rail networks because of the obvious economic benefits, especially as oil prices are expected to double in the next decade.

"Last year the Green Party prepared an alternative transport budget to the Government's, one that will save $3.5 billion overall but still include an additional $1 billion investment into KiwiRail.

"Not only can we afford to invest in rail, we can't afford not to.

"We need smart, green transport investment now so all New Zealanders can benefit from a resilient transport network in the future."

Ends

More government cash for roads as rail line scrappedTuesday, 2 October 2012, 2:04 pmPress Release: New Zealand Labour Party

Phil TWYFORDTransport Spokesperson

Moana MACKEYList MP based in Gisborne 2 October 2012 MEDIA STATEMENT

More government cash for roads as rail line scrapped

The decision to close the Gisborne-Napier rail line is a direct result of the Government’s policy of pouring billions of dollars into motorways while setting KiwiRail up to fail, says Labour.

“The Government has got its transport priorities wrong. This is just the latest casualty” said Labour’s Transport spokesperson Phil Twyford.

“KiwiRail might be fronting the announcement but it is a political decision made at Cabinet level and has, without doubt been signed off by the Minister of Transport.

“It is the logical consequence of the unrealistic financial targets National has imposed on KiwiRail, expecting it to find $3.75 billion from its own balance sheet for capital expenditure.

“That policy has forced KiwiRail to sack 158 workers and defer network maintenance for three years, and now it has forced the closure of the Gisborne to Napier line.

“National’s obsession with motorways at the expense of other transport modes has left Gisborne stripped of an economic lifeline. It is ironic the Transport Minister has announced $4 million to be spent on the Gisborne-Napier highway, which is the same amount it would have cost the Government to repair the line after part of it was damaged by a slip.

“If Gerry Brownlee thinks he can sweeten the pill by spending $4 million on building a few passing lanes on a road, then he is clearly not in touch with local opinion,” Phil Twyford said.

Gisborne-based Labour List MP Moana Mackey described today’s announcement as a betrayal but said it was hardly surprising given the Government’s treatment of the thousands of people who had fought to save the line.

“Locals have pleaded to keep this section of line open. They have protested, they have petitioned the government. Yet each time they have been told there isn’t enough money in the coffers to fix it.

“No one should be fooled by KiwiRail talking about ‘mothballing’ the line. Any rail expert will tell you that once you mothball a line it is prohibitively expensive to open it down the track. Once it is closed, it is closed for good,” said Moana Mackey.

ENDS

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